Broadcom (AVGO) reportedly backs a USD 35bln AI chip order to boost demand, with plans to finance over 20 gigawatts of compute capacity, potentially impacting credit through chip lease financial backstop, reports The Information

"The transaction will have a “modestly negative impact” on Broadcom’s credit due to the “debt-like obligation” of the backstop, S&P Global Ratings wrote in a note." "More deals are likely. Broadcom described this one as the first transaction in a larger plan to work with Apollo and Blackstone to finance more than 20 GW of compute. That suggests its ambitions, if fulfilled, could see it providing future guarantees on deals worth a combined $700 billion in chip purchases, although the company’s backstop is very limited."